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Technology Stocks : USAT Long Distance Telecommunications -- Ignore unavailable to you. Want to Upgrade?

To: tonto who wrote (244)	2/2/1999 3:00:00 PM
From: Sir Auric Goldfinger	Respond to of 397

Too Funny looks likes they're making excuses for reality:" USA Talks.com Fires Its Marketing Firm Amid Poor Sales San Diego, Feb. 2 (Bloomberg) -- USA Talks.com fired Trendmark Inc., a marketing company that provided most of the 2,300 customers for its start-up Internet telephone service, because of poor sales. It also canceled its agreement to acquire Trendmark, a privately owned company based in Memphis, Tennessee. USA Talks.com in October began marketing long distance telephone service routed over the Internet. Almost all selling was done by Trendmark, whose 15,000 ''distributors'' sell directly to consumers. Sales through last week totaled $230,000. ''Their sales didn't meet our expectations,'' said Maggie Yates, USA Talks.com's marketing director. ''This sales structure wasn't working. We wanted tighter control of our sales process.'' She said a telemarketing firm was hired to do selling and that the company will honor sales made by Trendmark before Feb. 1. Yesterday, the company began charging between $20 and $60 a month for unlimited long-distance calls. Before then, service was free while technical shortcomings were worked out. The only revenue was from customers who paid $100 registration fees to take the service after the free trial period. William Ervine, USA Talks.com president, said last week in an interview sales were going well. He said he expects as many as 500,000 customers by year-end and profit of $16 million on revenue of $85 million. Four days ago, the Securities and Exchange Commission ordered a two-week halt in trading of USA Talks.com because ''questions have been raised about the accuracy and adequacy of public information on the company.'' It said the questions pertained in part to the status and extent of the company's business operations. It provided no details. The day before they were suspended, USA Talks.com shares gained 5 1/4 to 52 1/4, giving the company a market value of $1.3 billion. They traded as low as 2 1/2 on Oct. 14. Intent to Buy USA Talks.com on Sept. 14 said it signed a letter of intent to buy Trendmark in exchange for 2.75 million shares. At the time, the acquisition was valued at $8.9 million. It would be worth $144 million at Thursday's closing stock price. USA Talks.com didn't mention it canceled the acquisition in today's announcement that it had dismissed Trendmark. Nor did it tell shareholders that nine days after it signed the acquisition agreement, Trendmark was accused by the Federal Trade Commission of making false claims about its ''Thin-Thin'' diet program. It settled the charges by agreeing not to lie in the future. ''We agreed not to do what we didn't do,'' Robert Gates, chief executive of Trendmark, said in an interview last week. He wasn't available for comment today. USA Talks.com's Ervine, an attorney, said last week he wasn't aware of the FTC's action until after he signed the letter of intent to buy Trendmark. ''Any violation of any state or federal regulation is of very grave concern to us, and we will not tolerate it,'' said Ervine. In his interview, Gates said USA Talks.com knew about the FTC's investigation. ''I told them about it early on,'' he said. Yates, the USA Talks.com maketing director, said today the investigation wasn't why Trendmark was fired. She said Allen Portnoy, chief executive, is in Los Angeles meeting with SEC officials. --David Evans in Los Angeles (310) 827-2348 through the New York newsroom (212) 318-2300 jh